The decade-old cryptocurrency industry has been a witness to some of the most uncertain market conditions. However, in the face of the industry’s changing dynamics and growing crypto-acceptance, concerns surrounding crypto-mining can be viewed in a new light. In order to identify the changing depth of the market, CoinShares Research shared a report determining the future of Bitcoin’s [BTC] mining network.
Focusing on the electricity consumption factor, the report estimated the total electricity draw of the entire Bitcoin mining industry to be approximately 4.7 GW, similar to its November 2018 reading.
Although the overall power consumption remains the same globally, the report reflected a steady trend of
reduction of Chinese geographical dominance among Bitcoin miners. This unforeseen reduction in miners can be attributed to the uncertainty of Chinese government’s policy towards miners. On the contrary, Chinese dominance in the hardware manufacturing sector remains as strong as ever and is showing no immediate
signs of reduction. Adding to it, the report says,
“It is also worth noting that the ~40% drop in hashrate observed at the tail-end of 2018 represents the first time we have ever observed a substantial and prolonged drop in hashrate as a result of sustained large-scale corrections in the Bitcoin price.”
Contradicting the previous trend, the recent spike in hashrate can be due to either re-starting of much of the previously shuttered mining gear or the deployment of next-generation mining gear at appreciable scale. Meanwhile, the current amount of energy required for hashing alone is estimated to be ~4.3 GW, up from 3.9 GW in November 2018. This result is also broadly in line with a ~25% increase in hashrate and a ~10% increase in gear efficiency. On an annualized basis, the report estimated that the network currently draws the equivalent of ~41 TWh.
Overall, CoinShares’ findings reaffirm that Bitcoin mining is acting as a global electricity buyer of the last resort and therefore, tends to cluster around comparatively under-utilized renewables’ infrastructure. As the crypto-industry matures in the public eye, mining could act as a driver of new renewables developments in locations that were previously uneconomical.
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